For the first time in decades I am using the health care system, including prescription medication. Medicare and Medigap coverage take care of my medical bills. Part D prescription coverage is another matter. The coverage and cost of prescription drugs is a maze, a mystery- nobody knows what the real cost of a prescription is. Retail list prices, discounts, rebates, tiers, generics add to the confusion.
I recently filled two prescriptions. One cost me $5.33 paid for by my plan. The second I was told was not covered – I’m still investigating that. Both were generics. The second was going to cost me $217, but then I pulled up my GoodRx app and I paid $107 instead. Go figure
NOTE: If you use Good Rx or a similar program, what you pay will not be applied to your insurance deductible so you need to look at your total potential Rx costs for the year to see your best option.
A PBM (pharmacy benefit manager) establishes a network of pharmacies that allows consumers with prescription drug insurance to readily fill their prescriptions. Network pharmacies accept discounted pricing in exchange for access to a plan’s members. A PBM’s network rates are generally far below the pharmacy’s U&C list price, especially for generic drugs. PBMs typically require pharmacies to accept discount cards to remain in the PBM’s pharmacy network.
That’s why a consumer without insurance saves money by having access to a PBM’s network rate, which is lower than the cash price. GoodRx provides a convenient and user-friendly interface for finding these PBM rates. Essentially, GoodRx is a PBM-backed program that passes a portion of rebates and network discounts off list directly to patients at the point of sale.
For a patient with insurance, benefit design and network rates can differ among PBMs. This difference creates an unusual arbitrage opportunity that lets the patient reduce out-of-pocket expenses by accessing the rates of another PBM.
GoodRx partners with multiple PBMs, including Express Scripts, OptumRx, MedImpact, and Navitus. Uninsured patients therefore avoid paying a retail pharmacy’s inflated U&C retail price for their prescriptions. Here’s an excerpt from page 24 of the S-1:
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This is why GoodRx defines its program’s “savings” as “the difference between the list price for a particular prescription at a particular pharmacy and the price paid by the GoodRx consumer for that prescription utilizing a GoodRx code available through our platform at that same pharmacy.” (emphasis added)
Patients would save even more if pharmacies set their U&C cash prices more reasonably. But most pharmacies won’t do so, because of their PBM contracts. Cash-pay generic programs are a minor exception.
The prescriptions available via GoodRx are not considered cash-pay, because the claims are adjudicated by a PBM. The PBM collects a per-prescription fee from the pharmacy whenever a consumer uses a discount program at a pharmacy. The PBM shares a portion of this fee with GoodRx, which directed the patient to the pharmacy.
GoodRx earns either a percentage of the pharmacy’s fee or a fixed fee per prescription.
Source of the above: https://www.drugchannels.net/2020/08/how-goodrx-profits-from-our-broken.html